Risk Assessment

The purpose of good management and good investing is to find the most realistic/likely scenario out of all the rosy and frightening scenarios. As the risk of loss goes up the rate of return must also go up. We expect more for the amount of risk we are willing to face. Natural and prudent in almost all situations. The problem these days is that it is really hard to accurately see what the future holds 12-18-36 months from now. Is it truly as rosy as the Administration says-? If so, why do they "fudge" the numbers-? I say "fudge" because it seems someone is selecting the data that will support their political needs.
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From Yahoo News/Reuters comes the report that "Nervous Investors Demand Bigger Returns".

"The world looks a lot more dangerous than it did only a few months ago and signs are that U.S. stock investors are starting to demand more for the added risk.

With important manufacturing and jobs data due next week, it could start to get even riskier.

That means nervous investors are likely to keep a lid on equity prices this year as they grapple with slowing global growth and a host of geopolitical risks from the Arab Spring to debt defaults in the euro zone."

Are we facing a period of higher economic and military risks. Will our political leaders/masters actually do something responsible and adult-? will we get words and spin or action-?

I have little faith in those sheep who claim to be our leaders but act like masters. Deeds count for more than words. Washington and our politicians generate words by the metric ton. Yet, even they do not know for what they are voting. They know little and careless about the effects of their pounds of verbiage. If it has a good sounding title, then what devilment is inside is fine. Their only concern is that no angry responses come back to them, specifically. Words are easy to hide behind. What have they done-? The Democrats haven't offered any budget proposals for over two years. Why-? Do they lack ideas or fear the reality that comes from standing for something-?

A question I have not found anyone able to answer; " We have borrowed and spent over one trillion dollars in something called stimulus. Have we received as much national economic good as if we had chosen one million citizens at random and given them one million dollars, tax-free-?"

I doubt that most people can tell you that a trillion is one million, millions. That number is simply too large for most of us to comprehend. We are running a debt of almost one million, five hundred thousand millions at present. We are strapped. If we have a national disaster we will be hard pressed to respond.

The usual answers are to raise taxes. But most often our sheepish leaders sell us a tax increase as applying only to the rich. What they do not tell us is that there are not enough rich people to pay for the mess we're in.

Their forecasts imply that a tax increase will bring no change in behavior on the part of those feeling the brunt. we all now that if our taxes go up, much like the cost of food and transportation, we have less to support the lifestyle. It does not take a leap of genius to realize that those who earn less also pay less. The rich own things. Our tax structure is based on income. Their income can be adjusted to earn less with much less pain than the poor or middle classes. As a past company owner I know that if we needed new equipment that cost would come from my income. Same with new facilities, repairs, upgrades, and increased wages. The owner gets paid last. Raise my taxes and I spend more on my company. I doubt that I am the only one who would make that choice.

The middle class has no such option. They are stuck with what they earn. If the company can't pay more then change jobs. But with this current high level of unemployment there are easily a couple of hundred people who will step up for that "low" paying job... So in reality, any tax increase is going to hit the middle class hardest. Our leaders cannot understand that -or- they think we can't. Either way, we're being lied to.

If we raise taxes and they hit the middle class will they demand higher wages or buy fewer consumer goods or simply hunker down and wait for this cycle to end-? My guess is a bit of all. Raising wages would work if customers would pay a higher price. If they refuse to buy the company goes under. A bankrupt company gets no praise for raising wages and paying more in taxes...

How does a country go bankrupt-? When we have no more credit and have refused again and again to cut our expenses what happens-? When a country spends itself into insolvency-what happens-? We don't know. It hasn't happened to the U.S. before. smaller countries have been rescued and placed on strict fiscal austerity budget. Do we turn over our country to the IMF and World Bank-?

So, yes. These are perilous times. Things must change and change quickly. will our "leaders" actually lead-? They claim to be Leaders every two years. Yet, now, when we really need some leadership we seem to be lacking.

Charles II

The Earl of Rochester said it best ""Here lies our Sovereign Lord, the King whose word no man relies on: He never said a foolish thing nor ever did a wise one"."


King of the World seems the best job. So much better than mere President of the United States.

From the above citation; "Obama has always preferred the symbolic authority of the grand utterance to the actual authority of a directed policy—a policy fought for in particulars, carefully sustained, and traceable to his own intentions. The command to kill or capture Osama bin Laden and the attempt to assassinate Anwar al-Awlaki in a drone strike, which closely followed the bin Laden success, are the exceptions that prove the rule: actions of a moment, decided and triggered by the president alone. His new Middle East speech, at the State Department on May 19, was in this sense a return to a favorite genre. "

Americans do not need a king. We do not need to be herded into a mass of bi-partisan compliance. Our native emphasis on the individual as the fount of all government powers is deeply ingrained... Of course, this speaks mainly for and applies mostly to generations soon passing.

Americans are unique among all nations. we can create our own jobs, our own futures, and our own style of both. Calling for us to "come together" is akin to the same herding mythology used by -all- totalitarian governments. Leave us alone.

We are not children. Explain things, reasons for an action.

DO NOT BEND TO PERSONAL DESTRUCTION, treat us as you would another grown-up. -WHY- is this proposed action important-?

If you want my vote, tell me why -you- can do what you promise. Tell me where/when you have done something before. Show me more than a pretty face, a pleasant manner and vague words with unknown meaning... America does not need another President-as-Celebrity or even President-as-talk-show-host. Leave those shallow people to TV and deal in facts.


AMERICA IS BROKE. UNLESS WE CHANGE OUR SPENDING HABITS QUICKLY, THINGS WILL ONLY GET WORSE...

Can we change-? Will we change-? Who has a plan-and- the backbone to weather these adult changes of direction-? Do we see anyone like that-? Is there anyone who can deal in details-?

Is it really that much easier to see the personality and ignore the danger-? Fix these serious problems and then we will go back to eating our Lotus Blossoms...

Do we dare demand our politicians act as adults and treat us as such-? That would be a huge change in our cultural acceptance of the Big Nanny who takes care of us and everything else in our lives. We have become domesticated and are now herded like animals for slaughter.

The boomer generation is retiring quickly. This generation is unique in history. We are the only generation that is larger than -both- the one that preceded and the one that follows, combined. We will be a huge burden on the entitlement system. We will sell our houses and free our capital to pay for living expenses as we head into our dotage. That means housing prices will soon be falling and staying low. Yes, a few will own more than one home. Not many. we are in danger of many more not having a home at all. and little/no way to pay property taxes, maintenance, repairs and monthly running costs... It is going to get ugly...and unless our "fearless leaders"http://www.blogger.com/img/blank.gif act like adults; it will get worse.

Funny/Ironic how every politician says "Vote for me. I'm a leader" then gets to the legislature and becomes a sheep following when the Judas Goat of their party walks past.

Enough lies. Enough fasle directions. Enough silly numbers that are selected to scare and mislead... be an adult and speak the truth as one adult to another. Fire the consultants. Be yourself. Who knows-? You might win simply by speaking the truth. There is no free lunch, Social security or health insurance. Everything has a cost. Explain how you would deal with it.

THAT would be a huge and pleasant change.

Where Are We-?

Like that hoary olde joke about the Fugawi tribe... I sense Americans are asking each other "Where Are We-?" and even more importantly "Where Are We Going-?"

I suppose we need t ask "Where Have We Been-?" Lyle Lovett once sang "You've got to look at what you've been thru to see what you've become"... That's us.

We are uncertain. We voted for "Change" but never knew we were signing up for "Fundamental Change to American society"... We got both, in varying degrees. Now we can only "Hope" that we can find ourselves and a way out. We are not like we were. The path we're on has never been done by anyone in the real world. Only academics, enjoying govt funding, have professed the collectivisation and re-distribution of wealth as a sustainable model. Even then, they assume humans are closer to angels than our own selfish, self-interested nature.

The TARP plan was flawed, but we faced a crisis of confidence in our financial institutions. Pres. Bush doubled down and requested the rest of the funds so that Pres. Obama could have flexibilty as needed. Pres. Obama then got the Stimulus Package and added bits of money. My memory-guess is approx $1.4 Trillion. How much has been spent-? We don't know. The rabbit holes got filled with cash. Some 200,000+ new federal employees were hired to monitor where it went.

I'm a simple guy. It seems to me that handing out $1 Million, tax-free to 1,400,000 (one million four hundred thousand) people chosen at random would have done more for the country.

People would have bought a lot of stuff; new cars, houses, furniture, started new businesses, paid down credit cards and so on. Plus No New Federal, State, County or Municipal employees would have been hired. So, our costs into the future would have been lower. The strings attached ar just beginning to be felt. They now hurt the states who took the poisoned money.

I'm tired and confused by all the funny numbers being batted around. I'm one of those who wants to know what's behind the numbers and what are the assumptions. we're not getting the TRUTH. Every set of numbers has a different source of actuals and different set of assumptions about the future. I've always believed that Revenue Forecasts are Promises. Expense Projections are Commitments. The revenue numbers are too rosy. The expense projections are short on details.

We owe money. We have NO way to pay it back. In business, that would be cause for great alarm. When a company files bankruptcy and you asked the owners/managers "What Happened-?" almost invariably they say "We Ran Out Of Time". Unless we recognize our problems; we will run out of time. when a person, business or country is stretched this thin, they lack any flexibility to act should an emergency arise.

Over 47% of US citizens pay no taxes.
Only 2% of those who do pay taxes pay over 56% of all our bills.
Over 50% of all of us, receive some type of check from the government.

We don't have a sustainable business model...
IOW, We are in deep _______ and know no way out of this mess.

We even refuse to believe we're in trouble.

So, should those who worry stock the bomb shelter and hunker down while we away the inevitable-? If we wait for those who say "Nope, No Problems" now to say "Oh S---!" won't it cost us a heck of a lot more-?

No business deserves to stay in business longer than it's value to its customers.

No country lasts forever.

What do we choose for our future-?


I'm thinking it's time for some more change. Hope alone is not gonna get us out of this mess.

Marxism Fails
You can't re-distribute what hasn't been collected because there is none to collect.

President Mikey-?

Its no secret that New York City Mayor Michael Bloomberg would like to be President. Unfortunately, he has a city to run and can't be gone for two years chasing the dream. The WSJ watching the Democrats set their calendars for primaries in 2008 has an interesting observation.

What if the 2008 process serves to favor someone else -- namely, a billionaire who wants to run as an independent? It's possible that both major party nominees could emerge from their accelerated primaries so bruised, and with such high negatives, that the voters will already be feeling buyer's remorse. Then someone like New York Mayor Michael Bloomberg could decide to get into the race, spend $500 million of his own money, and truly remake the Presidential race.

It's a long, long time from February 5, 2008 until we get to the conventions in the Summer. It's even further from February to November. A man with a multi-billion dollar net worth could spend $500 million and run almost unopposed. Since we have turned politics into entertainment, the public will be bored with the candidates by February... The media will have said everything 15 times and we will be turned off... What else have we got to do? Watch and listen to Mayor Mikey tell us why he should be the one and the traveling circus tell us why he is the wrong one?

It'll be fun watching and handicapping the race... Best show in town-!